The economic picture is brightening all across the country, and with it, the real estate market is seeing welcome gains. Encouraging predictions for 2015 in Freddie Mac’s U.S. Economic and Housing Market Outlook last November included a 20 percent rise in homebuilding, home prices remaining in the affordable range and a slight rise in mortgage rates to five percent by the end of the year.
However, Dale Modica, Senior Vice President/Managing Broker in the Midtown Office of Berkshire Hathaway HomeServices Georgia Properties, said that he expects local interest rates will likely remain at historic lows for most of the upcoming year.
This is all good news, and there’s even better news for Intown. According to the latest housing report from realtor.com, there are 10 metro areas in the country that are particularly “ready for significant acceleration across housing metrics” in 2015. Topping the list is Atlanta and Sandy Springs.
“Intown Atlanta is going to continue to be a relatively strong market area,” David Boehmig, President and Co-Founder of Atlanta Fine Homes Sotheby’s International Realty confirmed. “As appreciation continues to manifest itself and more homes emerge from being ‘underwater,’ there will more homes eligible to be sold, bringing needed inventory to market.”
While real estate sales will likely remain flat or inch up slightly across the country, home sales inside Atlanta’s perimeter will see a 10 to 12 percent increase. Similarly, prices are expected to rise 3 to 6 percent in the U.S., and Intown housing will be at the high end of that range.
Dac Carver, Vice President and Managing Broker at Beacham & Company Realtors, noted that there’s an expectation that the area’s housing inventory and sales will continue to rise at a steady pace, if not in tandem.
“Inventory has risen significantly in the past year, but the months supply of inventory, which is measured against home sales, is actually down, which shows the market is absorbing inventory as fast as we put it on the market,” Carver explained. “We also expect to see home price appreciation to moderate next year as another product of rising inventory. This will help keep housing affordable for first-time buyers who are under-represented in the market, compared to historical norms.”
Prices are much higher than last year, but the rate at which they’re rising is slowing down. Vic Miller, Managing Broker at the Coldwell Banker Intown Office supplied some details: the median sales price was $200,000 in November 2014, up 16.3 percent over the previous November ($172,000), and up 38 percent over November 2012 when it was $145,000. The average sales price in November 2014 was $259,557, up 13 percent from $230,000 in November 2013.
“While we’ve moved to a more balanced buyer/seller market, many homeowners think we’re in a seller’s market and are a bit overzealous on their prices – and homes that are not priced appropriately are not selling,” Miller said. “Competitively priced homes are seeing great activity and, at times, multiple offers. The market always adjusts to what buyers are willing to pay.”
There’s no doubt that the biggest trend in real estate is the migration to Intown neighborhoods, and there’s also no doubt that the trend will continue. Realtors list a variety of reasons for the surge.
“Over the last decade or so, we’ve seen the desire of homebuyers to live closer to work. This hasn’t happened just in Atlanta, but around the country,” Carver reported. “We also see more empty nesters deciding to stay or move Intown for lifestyle reasons.”
Carver stated that the trend is accelerating because Intown has so much more to offer than just 10 years ago. Today, there’s a greater concentration of retail stores and restaurants, along with amenities like the Beltline.
Modica also commented on the influx of Intown homebuyers, saying that he expects it to increase in 2015, due mainly to the increased buying power of millennials, a generation that is health and eco-conscious. “Many choose to walk or bike to work,” he said. “The millennial generation doesn’t want to spend time on a long commute, either to work or to entertainment after work. They want to live close to where they work and play.”
Boehmig chalked up the popularity of Intown housing to the lifestyle priorities of buyers. According to him, homebuyers move here to be close to the arts, the dog friendly nature of the area, the many mid to upper end restaurants, the parks, access to MARTA and the wide range of architectural styles that are so inviting.
From a national perspective, Atlanta is still one of the most affordable major cities in the U.S. for first-time homebuyers, Miller said. “The average sales price in Atlanta buys you a really nice home, even a four-bedroom in the suburbs. In other markets, such as the suburbs of Washington, D.C., a similar home would cost close to $1 million. So it’s no surprise Atlanta is a very young city and a great place for young professionals, fueled by the low cost of living and number of colleges in the area.”
Miller also advised buyers to take advantage of the historically low rates now, since the recovering economy will affect them. Rising interest rates usually signify an overall improvement in the economy, which signals more job opportunities, raises and promotions.